Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinGold dipped 0.2% to close under $1,875 as upbeat US data and higher inflation expectations lifted yields and the dollar, pressuring alternative stores of value. The metal inched down 0.1% for the week.

The University of Michigan survey of consumer sentiment rose in February to a 13-month high as households became cautiously hopeful that the economy could experience a soft landing as inflation starts to decline. Sentiment remained weak, however, at 66.4, well-below its pre-pandemic peak of 101.

The December consumer price index was revised slightly higher to show inflation rose 0.1% rather than fell by that amount.

Markets are bracing for the possibility that the January CPI, due next week, may show prices rising by even more. An extremely strong January jobs report and improved reading in the ISM services sector suggest residual strength in labor market and economy, both of which are drivers of inflation.

Benchmark 10-year Treasury yields marched to 3.74% as traders speculated that the Fed will continue to raise interest, albeit at a slower pace. Higher yields are a headwind for gold because they increase the opportunity cost for holding it instead of bonds as a safe-haven asset.

The dollar tracked higher with yields, adding 0.3% against major rivals. A stronger dollar weighs on gold and other commodities by making them pricier overseas.

The other precious metals were lower for the day and week. Silver dropped 0.3% for a weekly loss of 1.5%. Platinum fell 1.3% today and 2.9% this week. Palladium shed 5.7% today for a weekly loss of 5.8%.

At the Comex close: April gold slipped $4 to $1,874.50; March silver slid 7 cents to $22.08; April platinum dropped $12.40 to $951.80; and March palladium shed $91.80 to $1,524.90 an ounce.